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UK Govt: Tate & Lyle closure would be 'devastating'

08 November 2011

The closure of Tate & Lyle's London refinery amid a dispute with the European Commission (EC) over new cane and beet buying rules, would be "devastating", the UK government has said

ASR, which acquired the plant from Tate & Lyle a year ago, has been hit by extra charges of £85m since the new system was introduced.

"If the refinery here were to close, clearly it would be devastating for a lot of local jobs. It would also be very bad news for the British economy. I sincerely hope that it isn't going to happen," Jim Paice, the UK's agriculture minister, told The Public Ledger at a press conference in London.

Including a sister site at Plaistow, the refinery employs 850 people.

"We've said already to the Commission that while we support the ending of sugar quotas, it should only happen alongside the liberalising of the market so that Tate & Lyle can access cane sugar on the world market," said Mr Paice.

To have to pay premium to bring cane sugar into the UK when sugar prices are already at such high levels "makes no sense at all", he added.

Luis Fernandez, the co-president of ASR, said last week: "It puts us at a significant competitive disadvantage which threatens the long-term viability of the operation."

Brussels is trying to ease supply constraints after cane sugar imports fell short from favoured suppliers - poor countries and the former colonies of France and the UK.

ASR argues that it should be allowed to buy on the free market without tariffs because refiners of sugar beet, which is grown in Europe, are not taxed in the same way. The company is already suing the Commission for €35m ($48m) in costs, accusing it of protectionism.

"We've had discussions with Tate & Lyle and are very much aware of their concerns. We want to see the British sugar market as it has always been - a market shared by cane and beet sugar," noted Mr Paice. "There's plenty of scope to expand beet production.

"Conversely it's only five years since we were reducing it but never mind. But (to expand output) we need to have the cane coming in as well, and I can assure you that we'll do what we can in negotiations to ensure that."

Mr Fernandez said: "There is only so long a business can operate under these circumstances. It is a wonderful business with great people that has a real reason to exist. We are hopeful that someone will see how crazy the system is."

An EC spokesperson said: "The Commission maintains that the regulations represent a balanced policy towards the sugar market and we will outline in detail policy reasons which led to their adoption."

Mr Paice said he has recently met with a number of traditional exporters of cane sugar to the UK, including Mauritius, Mozambique and certain West Indian countries. "They're all keen to continue to export cane sugar into this country. It's very important to their economies," he concluded.


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